| SGM Publishing Copyright 2006-2012 |
| The Yield Hunter Let's Make some money and sleep well at night In our 6th Year |
| 2009/2010/2011/2012 Model Portfolios High Yield Portfolio--Live High Quality Portfolio-Live Blended Quality Portfolio-Live Canadian Income Portfolio-Live |
A Look at a New U.S. Royalty Trust (Oil Focused and 70% Hedged at $115 until March 2014)
May 22, 2012 10 pm
Pacific Coast Oil Trust (ticker:ROYT) is not a U.S. Royalty Trust that you hear much about--no one is writing about it and there is just
little attention paid to it.
ROYT has just been trading for 14 days---and of course their timing on the launch was about as bad as it could be---just as crude
prices were sinking. The shares came at $20 and now are trading at a close of $17.17 today.
ROYT is oil focused with almost all revenue derived from crude from the Los Angeles and Santa Maria basins in Southern California.
Unlike most of the new U.S. Royalty Trusts launched lately this trust is not bounded by a certain number of barrels of energy
extracted. They will simply extract the crude and the trust will continue until annual income is less than $2,000,000 annually for two
consecutive years or until 75% of the unit holders vote to terminate the trust.
The trust just declared their first MONTHLY payment of 16.234 cents/unit ($1.95/annually) which gives an annualized yield of 11.4%.
The Trust has approximately 70% of the crude production sold at $115/barrel until March 31, 2014.
You can get all the info here from their registration statement.
If you are an oil bull this is a Trust that is worth checking out further. We are putting it on our 'watchlist'.
A Pause That Refreshs--European Bank Preferreds Bounce Back Strongly
May 21, 2012 10 pm
After last weeks shellacking it was nice to get some bounce back today. In particular the preferred stocks of the European banks
bounced back strongly.
Most issues of Deutsch Bank Trust Preferreds were up 3-5% today while regular Preferred issues from Barclays and HSBC were up
2-3%---for those with some risk tolerance the Deutsch Bank issues present a higher risk play on yield with current yields in the 7.5%
area.
Preferred shares of European insurers bounced back very strongly after last weeks poundings---Aegons preferred shares were up
a solid 5%., bringing current yields to the 7.5% area.
We only point out the European shares as they present opportunity---for those with more risk tolerance than us. We believe there
will be 'scares' ahead with the Europeans unable to get their act together--but who knows.
Caution should be used by those buying these banking preferred shares.
WARNING--Hugoton Royalty Trust (a U.S. Royalty Trust) Likely to Suspend or
Dramatically Reduce Distributions
May 21, 2012 Noon
NOTE From Fridays Distributions Announcement
As noted in the first quarter Form 10-Q filed on April 27, 2012, XTO Energy reached a tentative settlement on the Fankhouser
litigation for $37 million which requires court approval. The hearing for formal court approval is scheduled for May 23, 2012.
Assuming the court approves the settlement, a fairness hearing will be scheduled at a later date. XTO Energy has advised the
trustee that the terms of the conveyances governing the Trust's net profits interests require the Trust to bear its 80% interest
in the settlement, or approximately $29.6 million. Upon payment of the settlement, it is expected that costs will exceed
revenues on properties underlying the Oklahoma and Kansas net profits interest. Based on recent revenue and expense levels,
it is expected that costs will exceed revenues for approximately 18 months; however, changes in oil or natural gas prices or
expenses could cause the time period to increase or decrease correspondingly. The net profits interest from Wyoming is
unaffected and payments will continue to be made from those properties. The settlement is expected to decrease the amount
of net profits going forward for the Oklahoma and Kansas properties due to changes in the way costs (such as gathering,
compression and fuel) associated with operating the properties will be allocated, resulting in a net gain to the royalty interest
owners. XTO Energy has stated that this expected net upward revision for the royalty interest owners will reduce applicable
net profits to XTO Energy and, correspondingly, to the Trust.
What does this mean?? Net profit interests from Oklahoma and Kansas properties will go away for 18 months---although Wyoming
interest will remain. Given the falling nature of their distributions we would expect either a suspension or a reduction to maybe a
penny or so. We will have to research a bit further---but given this 'issue' we would expect this issue to fall to the single digits for the
next year or so. Until the end of the reduction can be seen---somewhere into the end of 2013.
Shit!! These Markets are Really Terrible
May 20, 2012 9 pm
On the 8th of the month (below) we wrote about the potential for issues in the equity and debt markets----we wrote how we were
considering 'hedges' on both the S&P 500 and the Treasury Bond. We were thinking more of a large potential 'event'---versus a daily
move down for days and days. Obviously, in hindsight, we should have hedged as we were contemplating---if we would have done
so we would have actually booked a large profit--versus just a breakeven hedge as we would have used options and the leverage
we would have achieved with the indexes would have been tremendous. Alas, we didn't pull the trigger so it is just wishful thinking
now.
The Europeans can't get their act together---they are pushing the world toward recession---and no matter what if it worsens in
Europe it will worsen in the U.S. and Canada. I keep hearing analysts claim on the business channels that we are doing well in
spite of European issues--and we are 'insulated'---that is pure bullshit!! We are in better shape---but U.S. companies are very
global and it will affect us very substantially in time. Granted the U.S. economy has done better than Europe---so far (and I am still
hopeful), but this is changing and within a couple more quarters if the European issues aren't handled it is goodbye growth--hello
recession for us. All you have to do is look at the 10 Year Treasury at 1.7% (a record close last week) to know that money is flooding
into a safe haven.
So what is one to do?? HOLD! We had mentioned below our ill timed purchase of the Whiting USA Trust II shares just a few days
ago----and fortunately we didn't purchase more EnerPlus in the Canadian Income Portfolio as it got creamed all week. The
Canadian Portfolio got pounded (because of oil and gas holdings)---but all in all the other Model Portfolios took just a modest hit
compared to the S&P and Dow---although anytime we take hits of 1-2% we are not happy. Our personal holdings modeled these
modest losses, although one of our accounts held the Whiting Trust also so that individual account took a but larger hit---but our
personal accounts are up 3.25% on the year and we are very happy with this performance.
We will HOLD for now---we will be watching oil and gas prices, the 10 year Treasury and the European situation closely. Certainly I
don't think we will be purchasing anything this week and hope that we will stabilize the markets and get back a 1% going into the
end of the month.
Oil Issues Get Pounded---we are Adding more Whiting USA Trust II (ticker:WHZ) (a
U.S. Royalty Trust)--11 am
May 16, 2012 11 pm
Of course we seldom try to 'time' the market with our purchases---but it is almost a certainty (or so it seems) when we buy everyone
else sells shortly thereafter.
And so it holds true with our last 2 buys. We purchased Whiting USA Trust II (ticker:WHZ) in late April at what we thought was a good
entry point--$23.09---today it closed at $20.01. Of course the price of oil has dropped a fair amount in the last 10 days, which is not
helpful---but one must remember that WHZ has 50% of production presold until mid 2014. WHZ just declared their first distribution
of over 95 cents giving a current annualized yield of over 19%!!!! Yikes---we love it. We increased the High Yield Porfolio position
in WHZ by 50% today. We like the drop in oil prices as the economy needs a boost---but the 15% loss in WHZ this week is plain
silly at this point given their hedges.
Likewise we purchased Enerplus (ticker:ERF) in the Canadian Income Portfolio just a week ago at $17.10/share. Today it closed at
$14.30---holy balls what is that about?? The current yield is over 15%---we have not bought more yet but we are contemplating it in
the next few days. Enerplus is approximately 50/50 split between oil and nat gas---most of the 2012 oil is hedged at selling prices
of $96/barrel while 42% of 2013 is sold at $103/barrel. Natural gas production is not hedged----with selling prices averaging $2.27
last quarter---so where the hell is the beef? We will likely buy more on Thursday.
While these short term hits have been substantial we believe we are likely nearing the end of the oil price decline and we are likely
to recapture most (or all) of these losses in the month ahead.
As Expected PS Business Parks (a REIT) Calls for Redemption of 2 Preferred
Issues
May 14, 2012
PS Business Parks (ticker:PSB) has announced the redemption of their PSB-I 6 7/8% issue and their PSB-H 7% issue for June 15,
2012---at par ($25) plus accrued dividends to that date. As we had mentioned below on 5/4/2012 PSB had 2 issues available to
redeem when they floated their new 6% issue.
Another good refi for them and fewer quality preferreds available at reasonable rates for us.
Apartment Investors and Management (a REIT) Redeems a Bunch of Preferreds
May 13, 2012
When you can sell a bunch of common shares (that are yielding just 2.6%) why would you keep paying 7 or 8% on your preferreds?
Unfortunately when Aimco announced the upcoming redemption of their T, V and Y series it took some pretty decent shares off the
market (or will sometime in the next 30 days).
Unlike the normal 'refi's' we have seen lately there likely will not be any new issue of preferred shares since the redemptions will be
paid for with the proceeds of the common share offering.
The tickers of the shares to be called are AIV-T, AIV-V and AIV-Y with yields of 8%, 8% and 7 7/8% respectively
No Surprise--Zions Bancorporation Calls for Redemption of 11% Preferreds
May 10, 2012
As mentioned on 5/2/2012 Zions floated a large issue of 7.9% preferreds and likely would call the 11% issue (ticker ZE-B)---now
they have done so. They will be redeemed on 6/15/2012 at par ($25). so holders will receive $25 plus the dividend of .6875.
Whiting USA Trust II Announces Nice Distribution
May 10, 2012
New U.S. Royalty Trust Whiting USA Trust II (ticker:WHZ) earlier this week announced their 1st distribution of .9546 which equates to
$3.82 per year---an annualized yield of 16.82% (based on yesterdays close).
We look for this payout to continue at a rate lower by a nickel or dime--with lower oil prices. This new U.S. Royalty Trust has a
substantial portion of their oil hedged for the next 2 years so they will not take the full brunt of the oil price drop we have seen the last
month.
These Markets are VERY Worrisome
May 8, 2012
The markets (all of them) are very worrisome given the elections in Greece and France last week. We are considering some
hedges to the portfolios for later this week. Our concern is an 'event' of some sort sending the markets reeling as they did in 2008.
Our potential hedges would be general market related--i.e. 'put' options on the S&P 500 and/or 'call' options on the Treasury Bonds.
The thought is if the equity markets would bounce UP we would essentially short the equity markets---while at the same time going
long the Treasury Bonds (both moves via options).
We do not believe that the U.S. economy is currently terrible---just that there will be contagion from Europe which is a giant mess.
On the flip side to panic and sell everything out generally ends up being the wrong thing to do---and we prefer to stay invested if we
can find a way to somewhat hedge the exposure.
Adding to the Canadian Income Portfolio
May 7, 2012 9 pm
Enerplus Corp (ticker:ERF) will be added to the Canadian Income Portfolio. Enerplus is a modest sized Canadian oil and gas
exploration and production company that is trading near a 52 week low. ERF trades on the New York exchange so there is plenty of
good liquidity with this issue.
ERF has near 400,000 acres of land under lease with huge overall potential---although currently the company derives a large
portion of revenue from natural gas--thus the share price has traded near a 52 week low.
We will purchase 500 shares around $17.50 per share. The current yield is in the neighborhood of 12% (18 cents per month) and
we think even with the low natural gas price the dividend will be maintained---PLUS any rebound of natural gas prices will flow to the
bottom line as they have no hedges in place.
Lastly - like all of the modest oil and gas plays there is always a chance of the company being acquired (although this is not our
reason to buy this one)
Here is their website for further research.
PS Business Parks Offering 6% Preferred Shares
May 4, 2012
PS Business Parks has priced an offering of preferred shares at a 6% coupon. This is a huge 14 million share offering (with an
option on 2.1 million more shares). PSB was not specific in the use of the proceeds, but they may include the redemption of
preferred shares (2 issues are now in the redemption window).
Of course PS Business Parks being affiliated with Public Storage (PSA) is a big plus and we consider this issue near investment
grade.
These shares are the normal $25/share, redeemable in 5 years. The new ticker is PSB-T.
The scoop is here.
Zions Bancorporation Sells 7.9% Preferred Shares
May 2, 2012 9 pm
It is no surprise that Zions is issuing Preferred Shares in a 'refi' transaction at this point in time-----they had to issue boat loads of
high coupon shares in 2010 to stay solvent (in particular some at 11% which were issued in 2010---with a redemption date as early
as June, 2012). The proceeds of this offering will be used to redeem the entire 11% issue (ticker:ZB-E).
They are selling new shares with a coupon of 7.9%----these are NON Cumulative, Redeemable Perpetual Preferred shares and will
trade with the ticker of ZB-F.
The shares will be redeemable at par beginning June 15, 2017.
Here is the scoop on these shares.
A Decent 4 Months in the Model Portfolios
May 2, 2012 8 am
Time to take a few minutes and recap the model portfolio performance over the first 4 months of the calender year.
1st of all the High Yield Model -- Up 4.7% for the 4 months (33.9% since inception). This model remains severely under invested as
it has 30% cash on hand. Cogdell Spencer Preferred (ticker:CSA-A) was redeemed because they were bought out ('earliest
redemption date' was actually later but because of the 'change of control' they became redeemable immediately). At 70% invested
we are looking for 2 more positions, although we did add Whiting USA Trust II (ticker:WHZ) just a week ago.
Next we have the High Quality Model -- Up 1.4% for the 4 months (24.5% since inception). This portfolio is 85.2% invested and
under performed the market based upon simply receiving dividends and having no capital gains anywhere. Our goal on this model
is just 6.5% annually and we will struggle to reach this goal unless we can find at least 1 solid capital gain possibility out there while
sticking to the conservative nature of this model.
The Blended Model Portfolio is up 3% (36.6% since inception). This model is 83.5% invested and performing exactly as it is
supposed to perform.
The star performer was the Canadian Income Model---up 9.5% year to date (11.7% since inception 6/2011). The model is now just
59% invested after Provident Energy and FutureMed were both acquired by competitors (certainly adding to our nice gains).
Over time the Blended Model performs the most consistently---and in fact we have structured our personal portfolio similar to the
Blended Model (after being more conservatively invested in past years).
Our plan is as follows----continue to try to move the portfolios toward 85-90% invested without doing anything stupid (buying a junk
issue in the quest for high yield etc). Find the Canadian issues that not only give a fair return but have a potential for further buyouts
(such as Provident Energy and FutureMed). Trade out of any issues trading above redemption price when near the redemption date
and redeploy cash to issues with longer dated redemption dates.
Lastly the markets make us nervous (nothing new here I guess). This economy is not really very stable and the lack of deficit
progress in Washington and the lack of solid employment numbers means we likely have turbulence ahead--this should keep
interest rates low---but could cause an 'event'---and we want to keep our eyes wide open.
Time to Add to the Model Portfolios
April 26, 2012 10 am
We will add the following issues to our model portfolios in the next 48 hours.
High Yield Model - We will add Whiting USA Trust II (ticker:WHZ) to the model. This is a U.S. Royalty trust which is oil focused and
should have a 20% yield when it begins paying distributions. This is a wasting asset so we would have initial plans to hold it for just
a couple years (depending on crude pricing).
High Quality Portfolio - We will add National Retail 6.625% Preferred shares (ticker:NNN-D). National Retail is a REIT--and over the
years has done very well as they are widely diversified. The shares are trading 1% over redemption price ($25), but are not
redeemable until 2017.
Blended Quality Model - We will add UMH Properties 8.25% Preferred shares (ticker:UMH-A). UMH is a REIT and owns
manufactured home communities. While their business does not thrill us - the yield does. The Blended Model holds both High
Quality and Low Quality issues.
These purchases will bring the models close to our fully invested target (90%). The Canadian Model which has done VERY WELL
this year remains under invested until such time as we can research issues further.
US Bancorp Launches Giant 6% (until 2017-then floating) Preferred Offering
April 23, 2012
US Bancorp has launched a Billion dollar preferred stock offering in their ongoing effort to redeem the last of their Trust Preferred
Shares.
These shares are 'regular' or 'traditional' preferred shares that will carry an initial yield of 6% which will switch to floating rate in
2017. These shares are non cumulative.
The new shares will have a ticker of USB-N and should begin trading within 10 days.
For the very conservative investor these shares may be worth a look. USB is one of the best run banking companies in the nation
and the floating rate after 2017 may present give some protection against higher rates in the future.
The offering documents are here.
Great Northern Iron Ore Trust Gets Hammered-----Reality Arrives!!
April 20, 2012
The inevitable happened this week (finally) when investors in Great Northern Iron Ore Trust (ticker:GNI) figured out they have only
$60-$70 worth of distributions left and the shares started the week at $90---the shares, of course, have plunged.
This U.S, Royalty Trust ends on 4/15/2015 and has traded as high as $120/unit this year---when it was obvious that the distributions
likely would amount to only $65 or so by the trust end date.
This week it started out at around $92/unit---then someone woke up. It is now trading at $60/unit!!!
This is a good lesson in reading the details on trusts and fully understanding when they will end and under what terms.
Warning--Whiting USA Trust I (ticker:WHX) will be the next one to plunge when it is understood the true value is
$8/unit and it is trading at $17.
SandRidge Mississippian Trust II (a new U.S. Royalty Trust) Now Trading
April 19, 2012
SandRidge Mississippian Trust II (ticker:SDR) is now trading.
This new trust is likely to have a distribution of $2.00 to $2.25 in the initial year---implying a distribution rate of 10-12%.
This trust will derive about 85% of income from crude oil and the balance from natural gas.
The trust may have some decent potential for investors that are long term oil and gas bulls as the trust runs until 12/31/2031
The offering documents are here.
CapLease (a mortgage REIT) to Issue Preferred Shares
April 17, 2012
CapLease (ticker:LSE) will issue 2 million shares of $25.00 8.375% cumulative, redeemable preferred shares. The terms will be
the normal terms---redeemable at par in 5 years.
Obviously the 8.375% rate on these shares indicate a moderate amount of risk with these shares (with investment grade REITs
issuing at around 6%)
The preliminary documents are here.
Pennsylvania Real Estate Investment Trust to Float 8.25% Preferred Shares
April 13, 2012
Mall operator Pennsylvania Real Estate Trust (ticker:PEI) is offering a Preferred offering of 8.25% shares. Given that PEI carries a bit
more risk than the average REIT the reward is equal to the risk.
These are typical, cumulative, redeemable (in 5 years) shares. The ticker will be PEI-A. Shares should trade within 30 days.
For investors willing to take a bit of risk the shares are worth looking at for a portfolio yield boost.
The preliminary prospectus is here.
Tortoise Energy Capital (ticker:TYY) (a closed end fund) Offering 3.95%
Mandatory Redeemable Preferreds -- To Redeem 5% Preferreds
April 13, 2012
Of course we know that Closed End Funds that issue either debt or preferred stock present some of the safest investments
available for an income investor (due to the SEC Act of 1940 which requires asset coverage of 200% on preferred issues and 300%
on debt issued by closed end funds)----but let's get real----3.95% !!! We will not be buying any of this preferred issue at this
time--although if interest rates in general doubled we would be interested in it at almost 8%.
We are very conservative investors but at this time 3.95% is even way too low for us (ticker:TYY-C)
The company will redeem their TYY-B 5% issue with the proceeds from this offering.
The shares are redeemable anytime after the 1st dividend period and must be redeemed in April, 2018 at $10 plus accrued
dividends. Tortoise will pay a modest 1% premium if shares are called before 4/2014---and a .5% premium if called before 4/2015.
The shares will pay their meager dividend on the 1st of each month
The preliminary info is here.
SandRidge Mississippian Trust II (a U.S. Royalty Trust) to Launch
April 9, 2012 1 pm
SandRidge Energy has commenced an offering in units of the SandRidge Mississippian Trust II (new ticker:SDR).
This new U.S. Royalty Trust has reserves that are approximately 50% oil and 50% gas--this may give it some upside in the future if
the price of natural gas was to firm and move higher.
The initial target distributions are in the 50-65 cents per quarter area indicating a 10% to 13% initial yield on a $20 issue price---of
course the distributions and the offering price could come higher or lower then estimates.
As always it is helpful to be bullish oil and gas on these Trusts as the level of oil and gas prices directly affect the payouts.
The registration statement is here.
Brandywine Realty Trust to Offer Preferred Shares
April 5, 2012 7 am
Brandywine Realty Trust (ticker:BDN) will issue 4,000,000 shares in a 6.9% cumulative, redeemable preferred offering
(ticker:BDN-E)
As is normal these shares are redeemable in 5 years at $25 plus accrued dividends.
The scoop on the issue is here.
Digital Realty Trust (a REIT) to Offer Preferred Shares
March 29, 2012 2:45 PM
Digital Realty Trust (ticker:DLR) is offering 7 million preferred shares with a coupon of 6.625%. The shares will have a ticker of
DLR-F and will begin trading within 30 days.
Digital Realty is a REIT with the emphasis on Data Centers.
The Preliminary Prospectus is here.
American Capital Agency (a Mortgage REIT) to Offer Preferred Shares (Updated)
March 29, 2012 2:30 PM
American Capital Agency Corp (ticker:AGNC) will be selling an issue of preferred shares with the new ticker of AGNC-A. Proceeds
are to be used for general corporate purposes.
Detail of the offering are not known at this time (filings are not posted) --- we believe these will come at a coupon of around 6.75%.
(actual coupon is 8%--wow this says something on the suspect quality of these shares)
The scoop on this issue is here.
GMX Resources Preferred Heading Down
March 29, 2012 1 pm
It has been exactly 2 months since the last GMX Resources Preferred (GMXR-P) 'crash' where the shares fell all the way to $5.75 on
fears of the suspension of the dividend. The company put the fears to rest and the shares shot back up to $15. We purchased near
$6 and sold around $12 (in a couple days time).
The next declaration date would not be until June 9th (or there abouts). It seems that there is fear and panic continuing to set into
the shares and they have traded down near $11 today.
Not for the faint of heart--any purchase in these shares during a plunge could result in total loss
We will be watching for a panic plunge here---if it plunges to the single digits we may be a speculative buyer. Anyone wishing to play
with this 'fire' should read the S & P report from March 27th. It is here.
If you scroll down to entries from early February you will find out our account of that plunge and our actions.
Arch Capital to Offer Preferred (corrected and finalized 3/28)
March 27, 2012 1 am
Arch Capital (ticker:ACGL), a Bermuda based re-insurance company will offer a large offering of NON cumulative, redeemable
preferred shares.
The shares will have a coupon of 6 3/4%---and the proceeds will be used to redeem the 7 7/8% shares outstanding (ticker:ARH-B)
and the 8% outstanding shares (ticker:ARH-A).
The new issue will have a ticker of ARH-C.
The final prospectus info is here.
Whiting USA Trust II (a U.S. Royalty Trust) Opens Trading
March 23, 2012 9:30 am
Whiting USA Trust II (ticker:WHZ) has opened trading this morning. They opened up around $21/share and have traded as high as
$23.50 before settling back to the $22.60 area.
We may pick some of this up for one of the models once trading settles down somewhat.
HCP (a Healthcare REIT) to Offer Preferred Shares
March 22, 2012 Noon
HCP (ticker:HCP), a healthcare REIT will offer Preferred shares in a 'refi' deal. HCP will be calling their 7 1/4% (ticker:HCP-E) and
7.1% (ticker:HCP-F) redeemable preferred shares.
Our best guess is this issue will price at around 6.5% (based on other large healthcare REIT offerings of late).
Further information is not available at this time---we will post as it is filed.
Hugoton Royalty Trust Continues Distribution Reductions
March 20, 2012 Noon (update 3 pm)
Hugoton Royalty Trust (ticker:HGT) distributions continue to drift down with the declaration of the April payout being reduced to a low
monthly rate of .077866 cents per unit--annualized (looking forward) this is a current yield of 6.16%.
We believe that this distribution will fall another cent or 2 in the months ahead. Only a strong Natural Gas bull should be buying this
trust as there are other opportunities out there that can reward your ownership with safer, higher yields.
Update
San Juan Basin (ticker:SJT) and Permian Basin Trust (ticker:PBT) have both just announced lower distributions---SJT down by
20ish% and PBT down by 10-12%. Cross Timbers (ticker:CRT) and Enduro (ticker:NDRO) both announced increases in
distributions.
Tidelands Royalty Trust (ticker:tirtz) announced a 40% cut.
Whiting USA Trust II (a New US Royalty Trust) to Finally Launch
March 17, 2012 1 pm
After months of teasing Whiting Petroleum will finally launch the Whiting USA Trust II (new ticker:WHZ). They had originally
registered this new Royalty Trust in December and we have been awaiting the launch.
For those that have followed Whiting USA Trust I you know that the trust will be oil and natural gas liquids focused and that the
yields will be huge (at least to start out---as much as 20%)---but it will be a wasting stream of distributions with NO ROYALTY
REMAINDER (nothing to sell when the trust ends).
This trust will be set up to end by the later to occur (1) when 11.79 million barrels of energy have been extracted from the acreage or
(2) December 31, 2021.
This differs from Whiting USA Trust I in that the first trust had no date---simply an end when a certain number of barrels are extracted.
The initial pro forma income statement for Whiting II suggest an initial distribution of around $3.75-4/share annually (a huge
distribution on a suggested initial pricing of $19-$20/share).
We believe that this Trust has much better terms as compared to the original Trust because of the potential to recover more than
11.79 million barrels----but of course this can't be known without a crystal ball.
Whiting II has 50% of production hedged at good selling prices out into 2014.
We MAY buy this trust if we can secure shares at $20 when trading begins--it would be a small position, but our initial read is that
there may be a decent value here.
You can read the registration statement here.
You can look at all available US Royalty Trusts here.
May 22, 2012 10 pm
Pacific Coast Oil Trust (ticker:ROYT) is not a U.S. Royalty Trust that you hear much about--no one is writing about it and there is just
little attention paid to it.
ROYT has just been trading for 14 days---and of course their timing on the launch was about as bad as it could be---just as crude
prices were sinking. The shares came at $20 and now are trading at a close of $17.17 today.
ROYT is oil focused with almost all revenue derived from crude from the Los Angeles and Santa Maria basins in Southern California.
Unlike most of the new U.S. Royalty Trusts launched lately this trust is not bounded by a certain number of barrels of energy
extracted. They will simply extract the crude and the trust will continue until annual income is less than $2,000,000 annually for two
consecutive years or until 75% of the unit holders vote to terminate the trust.
The trust just declared their first MONTHLY payment of 16.234 cents/unit ($1.95/annually) which gives an annualized yield of 11.4%.
The Trust has approximately 70% of the crude production sold at $115/barrel until March 31, 2014.
You can get all the info here from their registration statement.
If you are an oil bull this is a Trust that is worth checking out further. We are putting it on our 'watchlist'.
A Pause That Refreshs--European Bank Preferreds Bounce Back Strongly
May 21, 2012 10 pm
After last weeks shellacking it was nice to get some bounce back today. In particular the preferred stocks of the European banks
bounced back strongly.
Most issues of Deutsch Bank Trust Preferreds were up 3-5% today while regular Preferred issues from Barclays and HSBC were up
2-3%---for those with some risk tolerance the Deutsch Bank issues present a higher risk play on yield with current yields in the 7.5%
area.
Preferred shares of European insurers bounced back very strongly after last weeks poundings---Aegons preferred shares were up
a solid 5%., bringing current yields to the 7.5% area.
We only point out the European shares as they present opportunity---for those with more risk tolerance than us. We believe there
will be 'scares' ahead with the Europeans unable to get their act together--but who knows.
Caution should be used by those buying these banking preferred shares.
WARNING--Hugoton Royalty Trust (a U.S. Royalty Trust) Likely to Suspend or
Dramatically Reduce Distributions
May 21, 2012 Noon
NOTE From Fridays Distributions Announcement
As noted in the first quarter Form 10-Q filed on April 27, 2012, XTO Energy reached a tentative settlement on the Fankhouser
litigation for $37 million which requires court approval. The hearing for formal court approval is scheduled for May 23, 2012.
Assuming the court approves the settlement, a fairness hearing will be scheduled at a later date. XTO Energy has advised the
trustee that the terms of the conveyances governing the Trust's net profits interests require the Trust to bear its 80% interest
in the settlement, or approximately $29.6 million. Upon payment of the settlement, it is expected that costs will exceed
revenues on properties underlying the Oklahoma and Kansas net profits interest. Based on recent revenue and expense levels,
it is expected that costs will exceed revenues for approximately 18 months; however, changes in oil or natural gas prices or
expenses could cause the time period to increase or decrease correspondingly. The net profits interest from Wyoming is
unaffected and payments will continue to be made from those properties. The settlement is expected to decrease the amount
of net profits going forward for the Oklahoma and Kansas properties due to changes in the way costs (such as gathering,
compression and fuel) associated with operating the properties will be allocated, resulting in a net gain to the royalty interest
owners. XTO Energy has stated that this expected net upward revision for the royalty interest owners will reduce applicable
net profits to XTO Energy and, correspondingly, to the Trust.
What does this mean?? Net profit interests from Oklahoma and Kansas properties will go away for 18 months---although Wyoming
interest will remain. Given the falling nature of their distributions we would expect either a suspension or a reduction to maybe a
penny or so. We will have to research a bit further---but given this 'issue' we would expect this issue to fall to the single digits for the
next year or so. Until the end of the reduction can be seen---somewhere into the end of 2013.
Shit!! These Markets are Really Terrible
May 20, 2012 9 pm
On the 8th of the month (below) we wrote about the potential for issues in the equity and debt markets----we wrote how we were
considering 'hedges' on both the S&P 500 and the Treasury Bond. We were thinking more of a large potential 'event'---versus a daily
move down for days and days. Obviously, in hindsight, we should have hedged as we were contemplating---if we would have done
so we would have actually booked a large profit--versus just a breakeven hedge as we would have used options and the leverage
we would have achieved with the indexes would have been tremendous. Alas, we didn't pull the trigger so it is just wishful thinking
now.
The Europeans can't get their act together---they are pushing the world toward recession---and no matter what if it worsens in
Europe it will worsen in the U.S. and Canada. I keep hearing analysts claim on the business channels that we are doing well in
spite of European issues--and we are 'insulated'---that is pure bullshit!! We are in better shape---but U.S. companies are very
global and it will affect us very substantially in time. Granted the U.S. economy has done better than Europe---so far (and I am still
hopeful), but this is changing and within a couple more quarters if the European issues aren't handled it is goodbye growth--hello
recession for us. All you have to do is look at the 10 Year Treasury at 1.7% (a record close last week) to know that money is flooding
into a safe haven.
So what is one to do?? HOLD! We had mentioned below our ill timed purchase of the Whiting USA Trust II shares just a few days
ago----and fortunately we didn't purchase more EnerPlus in the Canadian Income Portfolio as it got creamed all week. The
Canadian Portfolio got pounded (because of oil and gas holdings)---but all in all the other Model Portfolios took just a modest hit
compared to the S&P and Dow---although anytime we take hits of 1-2% we are not happy. Our personal holdings modeled these
modest losses, although one of our accounts held the Whiting Trust also so that individual account took a but larger hit---but our
personal accounts are up 3.25% on the year and we are very happy with this performance.
We will HOLD for now---we will be watching oil and gas prices, the 10 year Treasury and the European situation closely. Certainly I
don't think we will be purchasing anything this week and hope that we will stabilize the markets and get back a 1% going into the
end of the month.
Oil Issues Get Pounded---we are Adding more Whiting USA Trust II (ticker:WHZ) (a
U.S. Royalty Trust)--11 am
May 16, 2012 11 pm
Of course we seldom try to 'time' the market with our purchases---but it is almost a certainty (or so it seems) when we buy everyone
else sells shortly thereafter.
And so it holds true with our last 2 buys. We purchased Whiting USA Trust II (ticker:WHZ) in late April at what we thought was a good
entry point--$23.09---today it closed at $20.01. Of course the price of oil has dropped a fair amount in the last 10 days, which is not
helpful---but one must remember that WHZ has 50% of production presold until mid 2014. WHZ just declared their first distribution
of over 95 cents giving a current annualized yield of over 19%!!!! Yikes---we love it. We increased the High Yield Porfolio position
in WHZ by 50% today. We like the drop in oil prices as the economy needs a boost---but the 15% loss in WHZ this week is plain
silly at this point given their hedges.
Likewise we purchased Enerplus (ticker:ERF) in the Canadian Income Portfolio just a week ago at $17.10/share. Today it closed at
$14.30---holy balls what is that about?? The current yield is over 15%---we have not bought more yet but we are contemplating it in
the next few days. Enerplus is approximately 50/50 split between oil and nat gas---most of the 2012 oil is hedged at selling prices
of $96/barrel while 42% of 2013 is sold at $103/barrel. Natural gas production is not hedged----with selling prices averaging $2.27
last quarter---so where the hell is the beef? We will likely buy more on Thursday.
While these short term hits have been substantial we believe we are likely nearing the end of the oil price decline and we are likely
to recapture most (or all) of these losses in the month ahead.
As Expected PS Business Parks (a REIT) Calls for Redemption of 2 Preferred
Issues
May 14, 2012
PS Business Parks (ticker:PSB) has announced the redemption of their PSB-I 6 7/8% issue and their PSB-H 7% issue for June 15,
2012---at par ($25) plus accrued dividends to that date. As we had mentioned below on 5/4/2012 PSB had 2 issues available to
redeem when they floated their new 6% issue.
Another good refi for them and fewer quality preferreds available at reasonable rates for us.
Apartment Investors and Management (a REIT) Redeems a Bunch of Preferreds
May 13, 2012
When you can sell a bunch of common shares (that are yielding just 2.6%) why would you keep paying 7 or 8% on your preferreds?
Unfortunately when Aimco announced the upcoming redemption of their T, V and Y series it took some pretty decent shares off the
market (or will sometime in the next 30 days).
Unlike the normal 'refi's' we have seen lately there likely will not be any new issue of preferred shares since the redemptions will be
paid for with the proceeds of the common share offering.
The tickers of the shares to be called are AIV-T, AIV-V and AIV-Y with yields of 8%, 8% and 7 7/8% respectively
No Surprise--Zions Bancorporation Calls for Redemption of 11% Preferreds
May 10, 2012
As mentioned on 5/2/2012 Zions floated a large issue of 7.9% preferreds and likely would call the 11% issue (ticker ZE-B)---now
they have done so. They will be redeemed on 6/15/2012 at par ($25). so holders will receive $25 plus the dividend of .6875.
Whiting USA Trust II Announces Nice Distribution
May 10, 2012
New U.S. Royalty Trust Whiting USA Trust II (ticker:WHZ) earlier this week announced their 1st distribution of .9546 which equates to
$3.82 per year---an annualized yield of 16.82% (based on yesterdays close).
We look for this payout to continue at a rate lower by a nickel or dime--with lower oil prices. This new U.S. Royalty Trust has a
substantial portion of their oil hedged for the next 2 years so they will not take the full brunt of the oil price drop we have seen the last
month.
These Markets are VERY Worrisome
May 8, 2012
The markets (all of them) are very worrisome given the elections in Greece and France last week. We are considering some
hedges to the portfolios for later this week. Our concern is an 'event' of some sort sending the markets reeling as they did in 2008.
Our potential hedges would be general market related--i.e. 'put' options on the S&P 500 and/or 'call' options on the Treasury Bonds.
The thought is if the equity markets would bounce UP we would essentially short the equity markets---while at the same time going
long the Treasury Bonds (both moves via options).
We do not believe that the U.S. economy is currently terrible---just that there will be contagion from Europe which is a giant mess.
On the flip side to panic and sell everything out generally ends up being the wrong thing to do---and we prefer to stay invested if we
can find a way to somewhat hedge the exposure.
Adding to the Canadian Income Portfolio
May 7, 2012 9 pm
Enerplus Corp (ticker:ERF) will be added to the Canadian Income Portfolio. Enerplus is a modest sized Canadian oil and gas
exploration and production company that is trading near a 52 week low. ERF trades on the New York exchange so there is plenty of
good liquidity with this issue.
ERF has near 400,000 acres of land under lease with huge overall potential---although currently the company derives a large
portion of revenue from natural gas--thus the share price has traded near a 52 week low.
We will purchase 500 shares around $17.50 per share. The current yield is in the neighborhood of 12% (18 cents per month) and
we think even with the low natural gas price the dividend will be maintained---PLUS any rebound of natural gas prices will flow to the
bottom line as they have no hedges in place.
Lastly - like all of the modest oil and gas plays there is always a chance of the company being acquired (although this is not our
reason to buy this one)
Here is their website for further research.
PS Business Parks Offering 6% Preferred Shares
May 4, 2012
PS Business Parks has priced an offering of preferred shares at a 6% coupon. This is a huge 14 million share offering (with an
option on 2.1 million more shares). PSB was not specific in the use of the proceeds, but they may include the redemption of
preferred shares (2 issues are now in the redemption window).
Of course PS Business Parks being affiliated with Public Storage (PSA) is a big plus and we consider this issue near investment
grade.
These shares are the normal $25/share, redeemable in 5 years. The new ticker is PSB-T.
The scoop is here.
Zions Bancorporation Sells 7.9% Preferred Shares
May 2, 2012 9 pm
It is no surprise that Zions is issuing Preferred Shares in a 'refi' transaction at this point in time-----they had to issue boat loads of
high coupon shares in 2010 to stay solvent (in particular some at 11% which were issued in 2010---with a redemption date as early
as June, 2012). The proceeds of this offering will be used to redeem the entire 11% issue (ticker:ZB-E).
They are selling new shares with a coupon of 7.9%----these are NON Cumulative, Redeemable Perpetual Preferred shares and will
trade with the ticker of ZB-F.
The shares will be redeemable at par beginning June 15, 2017.
Here is the scoop on these shares.
A Decent 4 Months in the Model Portfolios
May 2, 2012 8 am
Time to take a few minutes and recap the model portfolio performance over the first 4 months of the calender year.
1st of all the High Yield Model -- Up 4.7% for the 4 months (33.9% since inception). This model remains severely under invested as
it has 30% cash on hand. Cogdell Spencer Preferred (ticker:CSA-A) was redeemed because they were bought out ('earliest
redemption date' was actually later but because of the 'change of control' they became redeemable immediately). At 70% invested
we are looking for 2 more positions, although we did add Whiting USA Trust II (ticker:WHZ) just a week ago.
Next we have the High Quality Model -- Up 1.4% for the 4 months (24.5% since inception). This portfolio is 85.2% invested and
under performed the market based upon simply receiving dividends and having no capital gains anywhere. Our goal on this model
is just 6.5% annually and we will struggle to reach this goal unless we can find at least 1 solid capital gain possibility out there while
sticking to the conservative nature of this model.
The Blended Model Portfolio is up 3% (36.6% since inception). This model is 83.5% invested and performing exactly as it is
supposed to perform.
The star performer was the Canadian Income Model---up 9.5% year to date (11.7% since inception 6/2011). The model is now just
59% invested after Provident Energy and FutureMed were both acquired by competitors (certainly adding to our nice gains).
Over time the Blended Model performs the most consistently---and in fact we have structured our personal portfolio similar to the
Blended Model (after being more conservatively invested in past years).
Our plan is as follows----continue to try to move the portfolios toward 85-90% invested without doing anything stupid (buying a junk
issue in the quest for high yield etc). Find the Canadian issues that not only give a fair return but have a potential for further buyouts
(such as Provident Energy and FutureMed). Trade out of any issues trading above redemption price when near the redemption date
and redeploy cash to issues with longer dated redemption dates.
Lastly the markets make us nervous (nothing new here I guess). This economy is not really very stable and the lack of deficit
progress in Washington and the lack of solid employment numbers means we likely have turbulence ahead--this should keep
interest rates low---but could cause an 'event'---and we want to keep our eyes wide open.
Time to Add to the Model Portfolios
April 26, 2012 10 am
We will add the following issues to our model portfolios in the next 48 hours.
High Yield Model - We will add Whiting USA Trust II (ticker:WHZ) to the model. This is a U.S. Royalty trust which is oil focused and
should have a 20% yield when it begins paying distributions. This is a wasting asset so we would have initial plans to hold it for just
a couple years (depending on crude pricing).
High Quality Portfolio - We will add National Retail 6.625% Preferred shares (ticker:NNN-D). National Retail is a REIT--and over the
years has done very well as they are widely diversified. The shares are trading 1% over redemption price ($25), but are not
redeemable until 2017.
Blended Quality Model - We will add UMH Properties 8.25% Preferred shares (ticker:UMH-A). UMH is a REIT and owns
manufactured home communities. While their business does not thrill us - the yield does. The Blended Model holds both High
Quality and Low Quality issues.
These purchases will bring the models close to our fully invested target (90%). The Canadian Model which has done VERY WELL
this year remains under invested until such time as we can research issues further.
US Bancorp Launches Giant 6% (until 2017-then floating) Preferred Offering
April 23, 2012
US Bancorp has launched a Billion dollar preferred stock offering in their ongoing effort to redeem the last of their Trust Preferred
Shares.
These shares are 'regular' or 'traditional' preferred shares that will carry an initial yield of 6% which will switch to floating rate in
2017. These shares are non cumulative.
The new shares will have a ticker of USB-N and should begin trading within 10 days.
For the very conservative investor these shares may be worth a look. USB is one of the best run banking companies in the nation
and the floating rate after 2017 may present give some protection against higher rates in the future.
The offering documents are here.
Great Northern Iron Ore Trust Gets Hammered-----Reality Arrives!!
April 20, 2012
The inevitable happened this week (finally) when investors in Great Northern Iron Ore Trust (ticker:GNI) figured out they have only
$60-$70 worth of distributions left and the shares started the week at $90---the shares, of course, have plunged.
This U.S, Royalty Trust ends on 4/15/2015 and has traded as high as $120/unit this year---when it was obvious that the distributions
likely would amount to only $65 or so by the trust end date.
This week it started out at around $92/unit---then someone woke up. It is now trading at $60/unit!!!
This is a good lesson in reading the details on trusts and fully understanding when they will end and under what terms.
Warning--Whiting USA Trust I (ticker:WHX) will be the next one to plunge when it is understood the true value is
$8/unit and it is trading at $17.
SandRidge Mississippian Trust II (a new U.S. Royalty Trust) Now Trading
April 19, 2012
SandRidge Mississippian Trust II (ticker:SDR) is now trading.
This new trust is likely to have a distribution of $2.00 to $2.25 in the initial year---implying a distribution rate of 10-12%.
This trust will derive about 85% of income from crude oil and the balance from natural gas.
The trust may have some decent potential for investors that are long term oil and gas bulls as the trust runs until 12/31/2031
The offering documents are here.
CapLease (a mortgage REIT) to Issue Preferred Shares
April 17, 2012
CapLease (ticker:LSE) will issue 2 million shares of $25.00 8.375% cumulative, redeemable preferred shares. The terms will be
the normal terms---redeemable at par in 5 years.
Obviously the 8.375% rate on these shares indicate a moderate amount of risk with these shares (with investment grade REITs
issuing at around 6%)
The preliminary documents are here.
Pennsylvania Real Estate Investment Trust to Float 8.25% Preferred Shares
April 13, 2012
Mall operator Pennsylvania Real Estate Trust (ticker:PEI) is offering a Preferred offering of 8.25% shares. Given that PEI carries a bit
more risk than the average REIT the reward is equal to the risk.
These are typical, cumulative, redeemable (in 5 years) shares. The ticker will be PEI-A. Shares should trade within 30 days.
For investors willing to take a bit of risk the shares are worth looking at for a portfolio yield boost.
The preliminary prospectus is here.
Tortoise Energy Capital (ticker:TYY) (a closed end fund) Offering 3.95%
Mandatory Redeemable Preferreds -- To Redeem 5% Preferreds
April 13, 2012
Of course we know that Closed End Funds that issue either debt or preferred stock present some of the safest investments
available for an income investor (due to the SEC Act of 1940 which requires asset coverage of 200% on preferred issues and 300%
on debt issued by closed end funds)----but let's get real----3.95% !!! We will not be buying any of this preferred issue at this
time--although if interest rates in general doubled we would be interested in it at almost 8%.
We are very conservative investors but at this time 3.95% is even way too low for us (ticker:TYY-C)
The company will redeem their TYY-B 5% issue with the proceeds from this offering.
The shares are redeemable anytime after the 1st dividend period and must be redeemed in April, 2018 at $10 plus accrued
dividends. Tortoise will pay a modest 1% premium if shares are called before 4/2014---and a .5% premium if called before 4/2015.
The shares will pay their meager dividend on the 1st of each month
The preliminary info is here.
SandRidge Mississippian Trust II (a U.S. Royalty Trust) to Launch
April 9, 2012 1 pm
SandRidge Energy has commenced an offering in units of the SandRidge Mississippian Trust II (new ticker:SDR).
This new U.S. Royalty Trust has reserves that are approximately 50% oil and 50% gas--this may give it some upside in the future if
the price of natural gas was to firm and move higher.
The initial target distributions are in the 50-65 cents per quarter area indicating a 10% to 13% initial yield on a $20 issue price---of
course the distributions and the offering price could come higher or lower then estimates.
As always it is helpful to be bullish oil and gas on these Trusts as the level of oil and gas prices directly affect the payouts.
The registration statement is here.
Brandywine Realty Trust to Offer Preferred Shares
April 5, 2012 7 am
Brandywine Realty Trust (ticker:BDN) will issue 4,000,000 shares in a 6.9% cumulative, redeemable preferred offering
(ticker:BDN-E)
As is normal these shares are redeemable in 5 years at $25 plus accrued dividends.
The scoop on the issue is here.
Digital Realty Trust (a REIT) to Offer Preferred Shares
March 29, 2012 2:45 PM
Digital Realty Trust (ticker:DLR) is offering 7 million preferred shares with a coupon of 6.625%. The shares will have a ticker of
DLR-F and will begin trading within 30 days.
Digital Realty is a REIT with the emphasis on Data Centers.
The Preliminary Prospectus is here.
American Capital Agency (a Mortgage REIT) to Offer Preferred Shares (Updated)
March 29, 2012 2:30 PM
American Capital Agency Corp (ticker:AGNC) will be selling an issue of preferred shares with the new ticker of AGNC-A. Proceeds
are to be used for general corporate purposes.
Detail of the offering are not known at this time (filings are not posted) --- we believe these will come at a coupon of around 6.75%.
(actual coupon is 8%--wow this says something on the suspect quality of these shares)
The scoop on this issue is here.
GMX Resources Preferred Heading Down
March 29, 2012 1 pm
It has been exactly 2 months since the last GMX Resources Preferred (GMXR-P) 'crash' where the shares fell all the way to $5.75 on
fears of the suspension of the dividend. The company put the fears to rest and the shares shot back up to $15. We purchased near
$6 and sold around $12 (in a couple days time).
The next declaration date would not be until June 9th (or there abouts). It seems that there is fear and panic continuing to set into
the shares and they have traded down near $11 today.
Not for the faint of heart--any purchase in these shares during a plunge could result in total loss
We will be watching for a panic plunge here---if it plunges to the single digits we may be a speculative buyer. Anyone wishing to play
with this 'fire' should read the S & P report from March 27th. It is here.
If you scroll down to entries from early February you will find out our account of that plunge and our actions.
Arch Capital to Offer Preferred (corrected and finalized 3/28)
March 27, 2012 1 am
Arch Capital (ticker:ACGL), a Bermuda based re-insurance company will offer a large offering of NON cumulative, redeemable
preferred shares.
The shares will have a coupon of 6 3/4%---and the proceeds will be used to redeem the 7 7/8% shares outstanding (ticker:ARH-B)
and the 8% outstanding shares (ticker:ARH-A).
The new issue will have a ticker of ARH-C.
The final prospectus info is here.
Whiting USA Trust II (a U.S. Royalty Trust) Opens Trading
March 23, 2012 9:30 am
Whiting USA Trust II (ticker:WHZ) has opened trading this morning. They opened up around $21/share and have traded as high as
$23.50 before settling back to the $22.60 area.
We may pick some of this up for one of the models once trading settles down somewhat.
HCP (a Healthcare REIT) to Offer Preferred Shares
March 22, 2012 Noon
HCP (ticker:HCP), a healthcare REIT will offer Preferred shares in a 'refi' deal. HCP will be calling their 7 1/4% (ticker:HCP-E) and
7.1% (ticker:HCP-F) redeemable preferred shares.
Our best guess is this issue will price at around 6.5% (based on other large healthcare REIT offerings of late).
Further information is not available at this time---we will post as it is filed.
Hugoton Royalty Trust Continues Distribution Reductions
March 20, 2012 Noon (update 3 pm)
Hugoton Royalty Trust (ticker:HGT) distributions continue to drift down with the declaration of the April payout being reduced to a low
monthly rate of .077866 cents per unit--annualized (looking forward) this is a current yield of 6.16%.
We believe that this distribution will fall another cent or 2 in the months ahead. Only a strong Natural Gas bull should be buying this
trust as there are other opportunities out there that can reward your ownership with safer, higher yields.
Update
San Juan Basin (ticker:SJT) and Permian Basin Trust (ticker:PBT) have both just announced lower distributions---SJT down by
20ish% and PBT down by 10-12%. Cross Timbers (ticker:CRT) and Enduro (ticker:NDRO) both announced increases in
distributions.
Tidelands Royalty Trust (ticker:tirtz) announced a 40% cut.
Whiting USA Trust II (a New US Royalty Trust) to Finally Launch
March 17, 2012 1 pm
After months of teasing Whiting Petroleum will finally launch the Whiting USA Trust II (new ticker:WHZ). They had originally
registered this new Royalty Trust in December and we have been awaiting the launch.
For those that have followed Whiting USA Trust I you know that the trust will be oil and natural gas liquids focused and that the
yields will be huge (at least to start out---as much as 20%)---but it will be a wasting stream of distributions with NO ROYALTY
REMAINDER (nothing to sell when the trust ends).
This trust will be set up to end by the later to occur (1) when 11.79 million barrels of energy have been extracted from the acreage or
(2) December 31, 2021.
This differs from Whiting USA Trust I in that the first trust had no date---simply an end when a certain number of barrels are extracted.
The initial pro forma income statement for Whiting II suggest an initial distribution of around $3.75-4/share annually (a huge
distribution on a suggested initial pricing of $19-$20/share).
We believe that this Trust has much better terms as compared to the original Trust because of the potential to recover more than
11.79 million barrels----but of course this can't be known without a crystal ball.
Whiting II has 50% of production hedged at good selling prices out into 2014.
We MAY buy this trust if we can secure shares at $20 when trading begins--it would be a small position, but our initial read is that
there may be a decent value here.
You can read the registration statement here.
You can look at all available US Royalty Trusts here.
What is 'The Yield
Hunter'?
We are not an investment
service--nor are we a
subscription service.
The Yield Hunter
website is simply the
opinion of 1 person (TK
McPartland) who has
been investing for almost
40 years.
There are not really many
good websites for income
investors--unless you pay
large subscription fees
(and then who knows
what you are getting).
We highlight many
securities that we like and
buy ourselves.
Additionally we run some
'Model Portfolios'-- testing
some ideas such as 'buy
and hold'--'High
Yield'---etc.
We do not recommend
securities as everyone
has their own
needs----and we are not
licensed investment
advisors.
Hunter'?
We are not an investment
service--nor are we a
subscription service.
The Yield Hunter
website is simply the
opinion of 1 person (TK
McPartland) who has
been investing for almost
40 years.
There are not really many
good websites for income
investors--unless you pay
large subscription fees
(and then who knows
what you are getting).
We highlight many
securities that we like and
buy ourselves.
Additionally we run some
'Model Portfolios'-- testing
some ideas such as 'buy
and hold'--'High
Yield'---etc.
We do not recommend
securities as everyone
has their own
needs----and we are not
licensed investment
advisors.
Live Prices and Current Yields
Utility Common Stocks - Alphabetical
Utility Common Stocks - By Yield
Preferred Stocks of Utilities (No $100 Issues)
Real Estate Investment Trusts 'REIT's - Alphabetical
Real Estate Investment Trusts 'REIT's" - By Yield
Real Estate Investment Trusts 'REIT's' - Preferred
Stocks
Master Limited Partnerships - Alphabetical
Master Limited Partnerships - By Yield
Canadian Income Issues
US Royalty Trusts
Shipping and Transportation
Utility Common Stocks - Alphabetical
Utility Common Stocks - By Yield
Preferred Stocks of Utilities (No $100 Issues)
Real Estate Investment Trusts 'REIT's - Alphabetical
Real Estate Investment Trusts 'REIT's" - By Yield
Real Estate Investment Trusts 'REIT's' - Preferred
Stocks
Master Limited Partnerships - Alphabetical
Master Limited Partnerships - By Yield
Canadian Income Issues
US Royalty Trusts
Shipping and Transportation
Updates/Changes/Issues
May 17, 2012 - Added 3 issues to the Canadian
Income List.
May 2, 2012 - Updated Gladstone Capital
Preferred ticker symbol (changed exchanges).
May 1, 2012 - Updated Model Portfolios
April 27, 2012 - added Rentech Nitrogen
(ticker:RNF) to the Master Limited Partnership
List.
April 26, 2012 - Corrected Canadian Income
Portfolio dividends (FutureMed--Deduct)
April 26, 2012 - Corrected High Yield Portfolio
dividends (fixed spreadsheet calculation)
April 22, 2012 - Added 3 additional Canadian
Income Issues to the list.
March 18, 2012 - Added 4 additional Canadian
Income Issues to the list.
March 5, 2012 - added Sort by Price page for
Regular Preferred Stocks
March 1, 2012 - Updated Model Portfolios
through 3/1/2012.
February 17, 2012 - Added 4 more Canadian
Income Issues to the page.
February 12, 2012 - Added more Canadian
Income Issues to the page.
January 26, 2012 - Added 5 more Master
Limited Partnerships to the MLP Page.
January 23, 2012 - added 4 more Master
Limited Partnerships (MLP's) to the MLP page.
January 23, 2012 - corrected High Quality
Income Model results for 2011--results
lowered by .3%
January 21, 2012 - Added 5 more Canadian
Income Isses to the Canadian Income Issue
page.
January 19, 2012 - Started to add links to the
US Royalty Trust page for terms of each trust.
January 19, 2012 - Google Cloud bogging down
on a sporadic basis leaving charts 'hanging".
January 18, 2012 - added 3 more Canadian
Issues to the Canadian Income Issue page.
January 17, 2011 - added 3 more Canadian
Issues to the Canadian Income Issues page.
Janaury 13, 2012 - added 3 more U.S. Royalty
Trusts to our listing.
January 11, 2012 - added another Canadian
Issue as well as another MLP.
May 17, 2012 - Added 3 issues to the Canadian
Income List.
May 2, 2012 - Updated Gladstone Capital
Preferred ticker symbol (changed exchanges).
May 1, 2012 - Updated Model Portfolios
April 27, 2012 - added Rentech Nitrogen
(ticker:RNF) to the Master Limited Partnership
List.
April 26, 2012 - Corrected Canadian Income
Portfolio dividends (FutureMed--Deduct)
April 26, 2012 - Corrected High Yield Portfolio
dividends (fixed spreadsheet calculation)
April 22, 2012 - Added 3 additional Canadian
Income Issues to the list.
March 18, 2012 - Added 4 additional Canadian
Income Issues to the list.
March 5, 2012 - added Sort by Price page for
Regular Preferred Stocks
March 1, 2012 - Updated Model Portfolios
through 3/1/2012.
February 17, 2012 - Added 4 more Canadian
Income Issues to the page.
February 12, 2012 - Added more Canadian
Income Issues to the page.
January 26, 2012 - Added 5 more Master
Limited Partnerships to the MLP Page.
January 23, 2012 - added 4 more Master
Limited Partnerships (MLP's) to the MLP page.
January 23, 2012 - corrected High Quality
Income Model results for 2011--results
lowered by .3%
January 21, 2012 - Added 5 more Canadian
Income Isses to the Canadian Income Issue
page.
January 19, 2012 - Started to add links to the
US Royalty Trust page for terms of each trust.
January 19, 2012 - Google Cloud bogging down
on a sporadic basis leaving charts 'hanging".
January 18, 2012 - added 3 more Canadian
Issues to the Canadian Income Issue page.
January 17, 2011 - added 3 more Canadian
Issues to the Canadian Income Issues page.
Janaury 13, 2012 - added 3 more U.S. Royalty
Trusts to our listing.
January 11, 2012 - added another Canadian
Issue as well as another MLP.
| Recent Articles Published On Seeking Alpha by The Yield Hunter General American Investors Keeps Preferred Buyback in Place December 19, 2011 3 High Yield HealthCare REITs We Like Now June 2, 2011 A Surprise Call of Fifth Third Bancorp Trust Preferred May 29, 2011 A Case for Liquidation of SuperTel Hospitality May 13, 2011 2 Retail REITS to Avoid May 2, 2011 Glacier Water Services: Little Known Stock with a Tasty 9% Yield April 26, 2011 |
Live Prices and Current Yields
Regular Preferred Stocks - Alphabetical
Regular Preferred Stocks - By Yield
Regular Pref Stocks - By Yield/ex Div Date
Regular Preferred Stocks - REITs
Monthly Paying Preferred Stocks
Reg Preferred $25 Issues - Trading Below Par ($25)
Trust Preferred Stocks - Alphabetical
Trust Preferred Stocks - By Yield
Trust Preferred Stocks - By Yield and Ex Div Date
Exchange Traded Debt - $25 Issues-Alphabetical
Exchange Traded Debt - $25 Issues-By Yield
Regular Preferred Stocks - Alphabetical
Regular Preferred Stocks - By Yield
Regular Pref Stocks - By Yield/ex Div Date
Regular Preferred Stocks - REITs
Monthly Paying Preferred Stocks
Reg Preferred $25 Issues - Trading Below Par ($25)
Trust Preferred Stocks - Alphabetical
Trust Preferred Stocks - By Yield
Trust Preferred Stocks - By Yield and Ex Div Date
Exchange Traded Debt - $25 Issues-Alphabetical
Exchange Traded Debt - $25 Issues-By Yield
New Issues
May 19, 2012 - Added Newer Exchange
Traded Debt Issue KKR Financial 7.5% Senior
Notes (ticker:KFI).
May 14, 2012 - Added New Issue PS Business
Parks 6% Preferred Stock (ticker:PSB-T).
May 7, 2012 - Add REIT Terreno Realty Corp
(ticker:TRNO) to the REIT list.
May 2, 2012 - Added New Issue Zions
Bancorporation 7.9% Non Cumulative
Perpetual Preferred Shares (ticker:ZB-F).
April 23, 2012 - Added New US Bancorp 6% (to
floating) Preferred Stock (tickerUSB-N).
Shares should trade within 10 days.
April 13, 2012 - Added New Issue Tortoise
Energy Capital Mandatory Redeemable
Preferred shares (ticker:TYY-C). Shares
should trade within 30 days
April 11, 2012 - Added new REIT - Retail
Properties of America (ticker:RPAI)
April 9, 2012 - Added SandRidge Mississippian
Trust II (a U.S. Royalty Trust) (ticker:SDR)
Issue should trade within 30 days.
April 2, 2012 - Added New Issue Digital Realty
Trust (ticker:DLR-F) cumulative Preferred
Stock. Shares should trade within 30 days.
March 31, 2012 - Added New Issue American
Capital Agency 8% Cumulative, Redeemable
Preferred Stock (ticker:AGNC-A). Shares
should trade within 30 days.
March 20, 2012 - Added New Issue Kilroy
Realty Cumulative Preferred (ticker:KRC-G)
6.875%. Shares should trade within 30 days.
March 18, 2012 - Added New US Royalty Trust
issue Whiting USA Trust II (ticker:WHZ) to the
US Royalty Trust List. Issue should trade
within 10 days
March 15, 2012 - Added New Issue Kayne
Anderson 4.25% Cumulative Redeemable
Mandatory Call Preferred Stock (ticker:KYN-E)
Shares should trade within 30 days.
March 13, 2012 - Added New Issue Axis
Capital 6.875% NON Cumulative, Redeemable
Preferred Stock (ticker-AXS-C). Shares
should trade within 30 days.
March 12, 2012 - Added New Issue Kimco
Realty 6% Cumulative, Redeemable Preferred
Stock (ticker-KIM-I). Shares should trade
within 30 days.
March 12, 2012 - Added New Issue Public
Storage 5.75% Cumulative, Redeemable
Preferred Stock (ticker-PSA-T). Shares
should trade within 30 days.
March 11, 2012 - Added New Issue Alexandria
Real Estate Equities 6.45% Cumulative
Redeemable Preferred Stock (ticker:ARE-E).
Shares should trade within 30 days.
March 2, 2012 - Added New Issue Health Care
REIT 6 1/2% Cumulative Redeemable
Preferred Stock (ticker:HCN-J). Shares
should trade within 30 days
March 1, 2012 - Added New Issue Gladstone
Investment 7.125% Term Preferred Stock
(ticker:GAINP). Shares should trade within 30
days.
May 19, 2012 - Added Newer Exchange
Traded Debt Issue KKR Financial 7.5% Senior
Notes (ticker:KFI).
May 14, 2012 - Added New Issue PS Business
Parks 6% Preferred Stock (ticker:PSB-T).
May 7, 2012 - Add REIT Terreno Realty Corp
(ticker:TRNO) to the REIT list.
May 2, 2012 - Added New Issue Zions
Bancorporation 7.9% Non Cumulative
Perpetual Preferred Shares (ticker:ZB-F).
April 23, 2012 - Added New US Bancorp 6% (to
floating) Preferred Stock (tickerUSB-N).
Shares should trade within 10 days.
April 13, 2012 - Added New Issue Tortoise
Energy Capital Mandatory Redeemable
Preferred shares (ticker:TYY-C). Shares
should trade within 30 days
April 11, 2012 - Added new REIT - Retail
Properties of America (ticker:RPAI)
April 9, 2012 - Added SandRidge Mississippian
Trust II (a U.S. Royalty Trust) (ticker:SDR)
Issue should trade within 30 days.
April 2, 2012 - Added New Issue Digital Realty
Trust (ticker:DLR-F) cumulative Preferred
Stock. Shares should trade within 30 days.
March 31, 2012 - Added New Issue American
Capital Agency 8% Cumulative, Redeemable
Preferred Stock (ticker:AGNC-A). Shares
should trade within 30 days.
March 20, 2012 - Added New Issue Kilroy
Realty Cumulative Preferred (ticker:KRC-G)
6.875%. Shares should trade within 30 days.
March 18, 2012 - Added New US Royalty Trust
issue Whiting USA Trust II (ticker:WHZ) to the
US Royalty Trust List. Issue should trade
within 10 days
March 15, 2012 - Added New Issue Kayne
Anderson 4.25% Cumulative Redeemable
Mandatory Call Preferred Stock (ticker:KYN-E)
Shares should trade within 30 days.
March 13, 2012 - Added New Issue Axis
Capital 6.875% NON Cumulative, Redeemable
Preferred Stock (ticker-AXS-C). Shares
should trade within 30 days.
March 12, 2012 - Added New Issue Kimco
Realty 6% Cumulative, Redeemable Preferred
Stock (ticker-KIM-I). Shares should trade
within 30 days.
March 12, 2012 - Added New Issue Public
Storage 5.75% Cumulative, Redeemable
Preferred Stock (ticker-PSA-T). Shares
should trade within 30 days.
March 11, 2012 - Added New Issue Alexandria
Real Estate Equities 6.45% Cumulative
Redeemable Preferred Stock (ticker:ARE-E).
Shares should trade within 30 days.
March 2, 2012 - Added New Issue Health Care
REIT 6 1/2% Cumulative Redeemable
Preferred Stock (ticker:HCN-J). Shares
should trade within 30 days
March 1, 2012 - Added New Issue Gladstone
Investment 7.125% Term Preferred Stock
(ticker:GAINP). Shares should trade within 30
days.